SSRN Id4404276

The benefits and limitations of ChatGPT in business
education and research: a focus on management science,

operations management and data analytics
Ivor Cribben1 and Yasser Zeinali1
1
Department of Accounting and Business Analytics, Alberta School of
Business, University of Alberta
June 8, 2023
Abstract
ChatGPT is an artificial-intelligence chatbot developed by OpenAI. It can be used

in a variety of applications including content creation, personalized recommendations,
copy creation, and for language translation. In business, it can be used for data analysis,
provide recommendations, and even process orders. Its benefits have been discussed
widely in popular media with several articles focusing on the changes it will bring to the
workforce and the way we live and work broadly. In this article, we discuss the benefits
and limitations of ChatGPT in business education and research with a particular focus
on the areas of management science, operations management and data analytics. We
provide a extensive systematic review of it capabilities and hope that both professors and
students use it as a helpful guide to return to frequently. For professors, it can design
courses, create syllabi and content (including lecture slides and assignments), help with
grading, and with student understanding. For students, it can explain complex concepts,
create and debug code, and create sample exam questions. Overall, we find that writing
Electronic copy available at: https://ssrn.com/abstract=4404276

and debugging code and grading are the greatest strengths of ChatGPT for educational
and research purposes. However, it has limitations including that it often makes errors
and requires a deeper or an advanced knowledge of the domain. Finally, the discussion
of ChatGPT in business education and research also raises problems regarding bias and
plagiarism.
Keywords: Generative AI, ChatGPT, business education, chatbot, AI, man-

agement science, operations management, data analytics
1 Introduction
ChatGPT is a natural language processing tool driven by artificial intelligence (AI) technol-
ogy that enables you to communicate with a chatbot. This language model can provide an-
swers and help with different tasks (Rudolph and Tan, 2023; Baidoo-Anu and Owusu Ansah,
2023; Mollick and Mollick, 2022). ChatGPT was created by OpenAI and launched on Novem-
ber 30, 2022. It was developed on a large language model (LLM) architecture called the Gen-
erative Pre-trained Transformer (GPT), specifically GPT-3 and a newer versions GPT-3.5
and GPT-4 (Dehouche, 2021; Liang et al., 2023). These models are considered autoregressive
language models that use deep learning to generate human-like text. These types of models
are trained on a massive amount of text data from the internet, such as books, articles,
blogs and various websites (Kasneci et al., 2023; Tlili et al., 2023; Mhlanga, 2023). The
language model inside ChatGPT was tuned using supervised learning as well as reinforce-
ment learning. According to an OpenAI statement, utilizing the Reinforcement Learning
on Human Feedback (RLHF) method is what makes ChatGPT unique and powerful (Singh
et al., 2022). Traffic to OpenAI has increased by about 3,500%, from 18.3 million to 672
million visits after ChatGPT’s release at the end of November, 2022. Figure 1 shows the
increasing number of OpenAI and ChatGPT users.
OpenAI launched both a free version of ChatGPT and a subscription plan (ChatGPT Plus)
which enables users to access the platform during peak times and has a faster response time

Figure 1: Daily worldwide visits to OpenAI’s website and the ChatGPT platform
Source by: https://www.cnbc.com
compared to the free version. Moreover, as of March 14, 2023, OpenAI introduced GPT-
4 which is available on ChatGPT Plus. GPT-4 is significantly larger and more powerful
than GPT-3, with 170 trillion parameters compared to GPT-3’s 175 billion parameters.
The difference between GPT-3.5 and GPT-4, according to OpenAI, emerges when the user
tries to perform more complex tasks. GPT-4 is more reliable, creative, and capable of
handling much more complicated instructions than GPT-3.5. OpenAI tested GPT-4 on
a variety of important exams such as Uniform Bar Exam, LSAT, GRE and some of the
traditional benchmarks designed for machine learning models to compare its performance to
previous versions. GPT-4 considerably outperforms existing models (see https://openai.
com/research/gpt-4 for more details). GPT-4 also includes the ability to input an image
and to perform certain tasks on images similar to what it can perform on a text input. For
example, GPT-4 generates text outputs including natural language and code given inputs
consisting of interspersed text and images. Image inputs are still a research preview and not
publicly available.
As the most advanced GPT-based model, the company Significant Gravitas released
Auto-GPT on GitHub on March 30, 2023. This open-source Python application is powered
by GPT-4 and is capable of completing tasks with minimal human intervention. Although
Auto-GPT and ChatGPT share the same technology foundation, their functions are notably
distinct. The key difference is that Auto-GPT can operate independently without the as-

sistance of human agents, while ChatGPT requires human prompts to function effectively.
For example, Auto-GPT can work towards an overarching objective by assigning itself new
smaller objectives, without human input. Auto-GPT is therefore a powerful and cutting-
edge tool in the field of AI. To obtain a comprehensive explanation of Auto-GPT’s features
and capabilities, as well as guidance on how to install the tool, see https://autogpt.net/.
ChatGPT has been applied to many academic and non-academic fields to analyze input
and to take actions. For instance, it can be used to remotely monitor patients by analyzing
data from sensors or other monitoring devices, giving real-time insights into the health status
of a patient (Iftikhar, 2023). In other research, Alshurafat (2023) explained how ChatGPT
can improve productivity and efficiency for accounting professionals by transforming their
working systems. Moreover, several researchers showed the ability of ChatGPT to write short
stories based on the information the user provides to the platform (McGee, 2023). Businesses
have also been leveraging ChatGPT to augment how humans work by automating repetitive
tasks while providing more engaging interactions with users. For example, companies have
used ChatGPT in the following ways: creating marketing content, brainstorming unique
ideas, writing computer code, automating parts of the sales process, delivering aftercare
services when customers buy products, translating text from one language to another and
increasing customer engagement.
Learning is a continuous and lifelong process. With the rapid advancement of technol-
ogy and the abundance of information learners (and educators) are continuously required
to adapt to the new technology, update their knowledge, and develop new skills in order
to stay relevant in a rapidly changing world. George Siemens first introduced this notion,
referred to as connectivism in learning theory (Siemens, 2004). Connectivism acknowledges
the transformative role of technology in learning, emphasizing the use of digital tools, online
communities, and other technological resources to access and share information, and partic-
ipate in learning networks (Downes, 2022). Moreover, connectivism suggests that educators
should focus on promoting networked learning environments and helping students develop

skills related to navigating and critically evaluating information sources, while also con-
sidering other established learning theories and instructional strategies (Utecht and Keller,
2019).
With respect to connectivism theory, academia is continuously exploring the latest trends
in computer technology in order to integrate them into education and to improve the learning
environment. However, new technologies can also be a source of controversy, particularly
when they disrupt traditional methods of teaching and learning. While digital technology
has the potential to enhance education by providing new opportunities for engagement and
collaboration, there may be resistance from some who are accustomed to traditional ap-
proaches and skeptical of the benefits that the new technology brings (Wedman and Heller,
1984). With time, the benefits of new technology may become evident as it is integrated into
the educational landscape and educators become more comfortable with its use (Ng, 2015).
For example, Sultan (2010) highlighted the benefits of cloud computing in education while
addressing concerns that may prevent institutions from adopting this technology. Moreover,
Singh (2021) contributed to the discourse by presenting a thoughtful analysis of the benefits
and challenges of using digital tools in education, with a particular focus on the emergence of
digital classrooms. It highlights the importance of effectively utilizing the benefits provided
by digital technology while also acknowledging the potential challenges that may arise.
While many stories in the media have focused on plagiarism in the education setting,
ChatGPT also has many benefits in the field of education and research including writing and
debugging computer code, simplifying complex concepts in various fields, creating content,
and writing essays (Dwivedi et al., 2023). For example, in order to examine ChatGPT’s
potential to help lawyers in their practice and to aid students in exams, a group of University
of Minnesota law professors took exams from ChatGPT. They claim that even though it is
challenging to conduct a thorough analysis and apply legal rules to a case’s facts, it could be
very beneficial for producing an initial draft that a student could then improve (Choi et al.,
2023).

There is currently some research papers on the impact of ChatGPT on education in
general but very few specifically on business education. Terwiesch (2023) discusses ChatGPT
and business education with the focus on whether the chatbot would receive an MBA from
Wharton. Moreover, Wood et al. (2023) checks how well ChatGPT answers accounting
assessment questions. However, we take a broader approach in this article. In particular,
we discuss the benefits and limitations of ChatGPT in business education and research with
a particular focus on the areas of management science, operations management and data
analytics. While the popular media (and blogs) have touched on several individual aspects
of ChatGPT on (business) education, we provide a more general systematic review of the
impact of the technology on several aspects education and research. We hope that both
professors and students use it as a helpful guide to return to frequently. We also hope
that professors send their students this comprehensive review paper at the beginning of the
semester for informational and educational purposes.
In this article, we consider ChatGPT’s use by both professors and students. For pro-
fessors, it can among many things design courses and curriculum, create syllabi, content,
assignments and exams, help with grading, and with student understanding. We also con-
sider the student perspective. It can explain complex concepts, create and debug code, and
create sample exam questions. Overall, we find that writing and debugging code and grading
are the greatest strengths of ChatGPT for educational and research purposes.
The abilities of ChatGPT to conduct various tasks within the field of business education
and education in general has caused conflicting reactions among students and professors as
this development in AI seems to have changed the current educational system (Nemorin
et al., 2023a). However, both students and professors need to adapt to it as this technology
is here to stay and will only improve over time. If it used in an appropriate fashion it
is capable of boosting the learning and teaching process; however, we also highlight some
inherent limitations, including the mistakes it makes and the fact that it requires knowledge
of the domain. The availability of ChatGPT also brings up ethical considerations such as

bias and plagiarism. New AI systems are changing higher education and both professors and
students should prepare themselves for its use but also to adapt to it, and find the optimal
way to use it (Nemorin et al., 2023b; Gillani et al., 2023). Hence, we believe there should be
transparent guidelines to maximize the use of this new tool specially for academia, including
the professor’s role in training students and guiding students on how to use the platform
properly and appropriately.
The remainder of this paper is organized as follows. We introduce ChatGPT and how
it works in in Section 2. We discuss ChatGPT from the professor perspective and student
perspective in Sections 3 and 4, respectively. In Section 5 we consider new ways to adapt to
these new tools, while in Section 6, we explain the limitations of the platform. Finally, we
conclude in Section 7.
2 ChatGPT
ChatGPT is an artificial intelligence (AI) chatbot developed by the company OpenAI and
launched in November 2022. ChatGPT is a generative language model based on the trans-
former architecture. A transformer is a type of data processing machine learning model that
is specifically designed to process sequences of elements, such as words in a sentence (Liu
et al., 2023; Qin et al., 2023). These models are capable of processing vast amounts of text
and learning to perform natural language processing tasks very effectively. For example, the
GPT-3 model was trained on a text set that includes over 8 million documents and over 10
billion words. Moreover, to train a model capable of analyzing this amount of information,
the GPT-3 model has 175 billion parameters in size which makes it one of the largest lan-
guage model ever trained. From this amount of data, the model learns to perform natural
language processing (NLP) tasks and produce logical, coherent and well-written informa-
tion. NLP is a branch of AI that helps computers understand, interpret and manipulate
human language using statistical, machine learning, and deep learning models. Together,
these technologies give computers the ability to process text or voice data that contains hu-

Figure 2: The overall structure of the ChatGPT introduced by OpenAI.
man language and comprehend it to its full extent, including the speaker’s or writer’s intent
and sentiment. Once the model is trained, it can be used to perform a wide range of tasks.
After creating the GPT-3 model, OpenAI fine-tuned the model to make it more efficient at
following instructions. As the main objective of language models is to predict the next word
in a sentence rather than to carry out a specific task, it is possible to produce undesirable
or false results that are not related to the input. Hence, OpenAI added a new layer to their
primary model named InstructGPT, a language model that enhances GPT-3’s ability to fol-
low instructions. To this end, OpenAI used Reinforcement Learning from Human Feedback
(RLHF), which is a reward model, that directly takes feedback from humans and uses it
as a reward to optimize, thereby creating a more efficient language model. Reinforcement
Learning (RL) is a type of machine learning technique that enables an agent to learn in an
interactive environment by trial and error while using feedback from its own actions and ex-
periences. RLHF improves the RL performance by including humans in the agent’s training
process (Rohmatillah and Chien, 2023). Therefore, ChatGPT is an intelligent model capable
of transforming text to large matrices and learning the patterns in its huge input data to
communicate with humans. The general structure of ChatGPT is shown in Figure 2.
3 Professor perspective
We now provide a systematic overview of the benefits and limitations of ChatGPT from
the perspective of the professor. We hope that professors use this article as a guide that

they frequently return to while teaching. ChatGPT can assist professors in several ways
to improve learning, engagement and efficiency inside and outside the classroom. We now
detail some of these benefits and also the limitations of the tool.
3.1 Creating course materials
ChatGPT can be used to create course materials for professors. In particular, it can create
sample syllabi and sample presentation slides. Section 8.2 (in the Appendix) contains a
sample syllabus for an ‘Introduction to Business Analytics’ course at the Master of Business
Administration (MBA) level. The tool provides a solid first draft or starting point but
offers no real creativity in terms of course design. Section 8.3 (in the Appendix) contains
some sample presentation slides on the topic of k-means clustering. Similar to the syllabus,
ChatGPT provides presentation slides (in latex format) that are a good foundation that
one could build off. However, it should not be a final version. For example, due to output
constraints ChatGPT fails to provide disadvantages of the k-mean clustering method on the
last slide.
ChatGPT can also be used to generate assignment and exam questions and solutions
related to various subjects. For example, by uploading all the materials from the course,
ChatGPT can generate sample multiple choice questions and solutions. As a result, Chat-
GPT can help professors generate various unique questions in order to diversify and improve
their assignments and exams. It could also be utilized to create individual assignments
and/or exams for each student or a group of students, thereby decreasing cheating in an
in-person exam setting.
Section 8.4 (in the Appendix) contains a sample solution created by ChatGPT for an
assignment from an ‘Introduction to Business Analytics’ course at the MBA level. Similar
to other sources, ChatGPT provides a solution that is roughly equivalent to B- grade. Its
solution lacks depth and creativity. It also has a limit on the number of words it can use. In
addition, Section 8.5 (in the Appendix) contains a sample solution created by ChatGPT for

an assignment from an ‘Multivariate Data Analysis’ course at the PhD level. ChatGPT’s
solution is again at a decent standard but it does make errors. First, it misspells the data
set teengamb in R. Second, it cannot compile the R code, hence it only provides R code
and general advice on the interpretation of results. Third, ChatGPT does not complete the
mathematical proofs in questions 3, 4, and 5. Overall, ChatGPT provides a solution that is
roughly equivalent to B/B- grade. However, it does provide very well written R code, that
is very valuable.
In addition, from the professor perspective, Copilot is a new AI digital assistant devel-
oped with ChatGPT (GPT-4 version) for Microsoft 365 programs including Word, Excel,
PowerPoint, Outlook and Teams. It enables users to communicate with the mentioned
programs and ask them to do specific tasks. For example, in Microsoft Word, Copilot col-
laborates with users to draft, edit, summarize, and produce documents. In Microsoft Excel,
Copilot can assist Excel users in discovering trends and patterns and in creating practical
data visualizations from structured or unstructured data. Additionally, there is no need to
remember formulas in order to perform statistical analysis. In Microsoft PowerPoint, Copi-
lot can transform ideas, texts or documents into a presentation with different designs. In
Microsoft Teams, in real time during a meeting or after a meeting, Copilot can summarize
key discussion points, including who said what and where people agree and disagree, and
suggest actions. Finally, Github have introduced “Github Copilot X”, which enables users
to communicate with the system through chat and voice, making it a more powerful tool for
writing, debugging and explaining codes. Copilot is useful for both education and research
purposes. For more information see https://github.com/features/preview/copilot-x.
3.2 Help with student understanding
Professors have the ability to train a chatbot based on ChatGPT to respond to students’
online questions outside office hours. For example, students could upload their questions
to an online discussion board on platforms such as eClass or blackboard, with ChatGPT
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providing the answers. The professor would then screen the resulting answers for possible
errors or to provide further clarification. As a result, students could obtain answers to their
questions more efficiently and substantial time could be saved for teaching assistants (TAs),
and professors. It could also save time on TA costs and office hours.
3.3 Grading
ChatGPT can be used to help both the professor and TAs with the grading of assignments
and exams. Specifically, it can be fed the solution of the assignment and/or exam, and the
student solutions, and it can decide on a grade. This would not only increase efficiency in
terms of time, but may decrease significantly the need for TAs in courses. It would also allow
for non-discriminatory and fairer grading. The professor could then randomly select a few
assignments/exams for thorough inspection in the grading process, similar to an external
examiner in some parts of the world. Additionally, it would allow the professors to recognize
common errors across the student body. To complete this task, professors would provide
both the solutions and students’ responses to a chatbot which is trained on ChatGPT and
it could evaluate students using several metrics such as analyzing sentiments or similarities
between the correct answer and the student’s responses. Cosine similarity, as an example, is
one of the metrics used in NLP to compare the text similarity of two documents, regardless
of their size. In fact, it calculates the cosine of the angle formed by two vectors projected
in a multidimensional space. We now show an example of ChatGPT grading two different
solutions. We first provide the correct answer and the marks for each part of the response
to the platform and then ask it to calculate the grade for the two students. Our input is the
following:
Students should provide the four following outputs in their answer to receive full credit which
is 100 points. Each of the outputs is worth 25 points. These four criteria are:
p-value ≤ 0.05 ; Significant = True ; Accuracy ≥ 90 ; Model = linear regression
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First student’s solution:
p-value = 0.02 ; Significant = True ; Accuracy = 94 ; Model = linear regression
Second student’s solution:

p-value = 0.1 ; Significant = False ; Accuracy = 85 ; Model = linear regression
What are the students grades?

ChatGPT’s output is the following:
Based on the given criteria, each of the required ouptuts is worth 25 points, and a total of
100 points are available for this question.
The first student has provided all four required ouptuts in their answer, with correct values
for each. Therefore, they should receive full credit (100) for this question.
The second student has only mentioned one of the required ouptuts (“Model = linear re-
gression”) and has not met the other criteria. Therefore, they should receive 25 points for
mentioning the correct model, but they will not receive any additional points for the other
criteria. In summary:
• First student: 100 points
• Second student: 25 points
Professors can also create their own grading applications using the ChatGPT Appli-
cation Programming Interface (API). ChatGPT API uses GPT-3.5 turbo, which has in-
creased system memory, making it possible to store several student responses and thereby
allowing ChatGPT to grade several solutions concurrently, allowing it to find common mis-
takes and patterns across students. There are two ways to use ChatGPT API; first, by
installing the latest version of OpenAI package for Python (+ openai v0.27.0) (we re-
fer readers to the OpenAI ChatGPT API documentation for more information: https:
//platform.openai.com/docs/guides/chat), and second, by using ChatGPT API end-
point, which is more flexible as it has the ability to work with other systems such as
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a JavaScript application. In addition, it enables users to easily update the ChatGPT
API parameters. For the second method, users should use the following url: https:
//platform.openai.com/docs/api-reference/chat/create.
3.4 Research
Professors may find ChatGPT to be a beneficial tool for their research. For example, Chat-
GPT can be used to generate research ideas. Researchers can simply input a research topic
into the platform and it can provide ideas, concepts, or keywords that the researcher can use
to develop research questions. Moreover, ChatGPT is able to simulate data for synthetic
data sets which can be used to support researchers arguments. In addition, when professors
are concerned about sharing their data, ChatGPT can disguise the data or add noise to it,
so they can share it for specific purposes such as reproducibility (Xiong and Cribben, 2022).
3.5 Academic integrity and plagiarism
There are clear benefits of ChatGPT, however, there are also obvious drawbacks. Professors
are constantly concerned about academic integrity in terms of plagiarism and unfortunately
AI based platforms only exacerbate this issue. For example, existing research has demon-
strated that AI generated-text detectors do not perform well with sophisticated NLP models
especially when the sentences are paraphrased to some extent (Tate et al., 2023). As a re-
sult, there are many ways for students to circumvent the detection of AI-based technologies
in their assignments and exams. However, professors still can check student assignments
and exams for plagiarism on various platforms. Two websites for detecting AI based sys-
tems such as ChatGPT are: GPTZero (https://gptzero.me/) and Hive Moderation AI (
https://hivemoderation.com/ai-generated-content-detection).
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4 Student perspective
We now provide a systematic overview of the benefits and limitations of ChatGPT from
the perspective of the student. We hope that students use this article as a guide that they
frequently return to during the semester. ChatGPT can also be very beneficial to students.
We not only describe the general benefits of ChatGPT for business students but we also
describe how students can use ChatGPT in specific MS/OM courses such as operations
research, supply chain and logistic analytics, statistics, data analytics and visualization.
Furthermore, many of the topics outlined in Section 3 are also relevant to students, including
the use of Copilot, the possible errors generated by ChatGPT, and the lack of creativity
evident in ChatGPT outputs.
4.1 Explaining complex concepts
ChatGPT can be used to explain complex concepts in simple terms. For example, if “explain
[topic]” is inputted into ChatGPT, the following output is obtained for the bullwhip effect,
an important topic in MS/OM:
“The Bullwhip Effect is a phenomenon that occurs in supply chain management where
small fluctuations in consumer demand can lead to amplified fluctuations in orders placed by
retailers, wholesalers, and manufacturers up the supply chain... . For example, if a retailer
experiences a sudden increase in demand for a product, they may increase their order from
the wholesaler to ensure they have enough inventory... . The Bullwhip Effect can be mitigated
through better communication and coordination among different stages of the supply chain.
This can include sharing demand forecasts, reducing lead times, and using technology to
improve visibility and data sharing. By reducing the impact of the Bullwhip Effect, supply
chains can become more efficient, responsive, and cost-effective.”
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4.2 Writing and debugging code
ChatGPT can provide computer code from several languages including Python, R, JavaScript,
Java, C++, C#, PHP, Swift, Ruby and Go. At times it struggles with challenging coding
tasks but in general it is very beneficial to students without a computer coding background
or those students who are beginning to learn how to code. As an example, a linear regression
code can be generated in ChatGPT using, “language name code [linear regression]”. Figure
3 demonstrates the sample step-by-step code for linear regression both in Python and R:
Figure 3: Sample Python and R computer codes for linear regression using ChatGPT.
ChatGPT is also capable of debugging code, and in particular, it is quick to identify

syntax errors and missing or incorrect input parameters for built-in functions. It offers
suggestions on how to fix code and provides the right syntax for the user following a brief
explanation of the problem. Figure 4 shows an example of incorrect code that is attempting
to first generate a random number and then print the reverse of it. It also shows ChatGPT’s
correction of the mistake with both suggestions and explanations. In particular, for this
example, ChatGPT provides the corrections: the randnt() function should be randint(),
the print statement for the original number was missing a closing parenthesis, and the print
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statement for the reversed number was missing a comma between the string and the variable.
Overall, we find that writing and debugging code is the greatest strength of ChatGPT for
student educational and research purposes.
Figure 4: The left hand side shows sample Python code (with errors) for first generating a
random number between 1 and 100 and then printing both the original and reverse number.
The right hand side shows ChatGPT’s correction of the computer code errors.
4.3 Exam preparation
As previously mentioned, ChatGPT can also be used to generate sample exam questions and
solutions related to various subjects. For example, by uploading all the materials from the
course, ChatGPT can generate sample multiple choice questions and solutions. As a result,
ChatGPT can help students obtain a deeper understanding of the course materials, but at
the same time it can provide feedback on their current level of understanding.
4.4 Summarizing papers
Students often have to read texts or journal papers and summarize their important ideas.
Students can use this capability as a reading companion to help them understand and revise
lengthy texts without having to read the entire text (again). This feature of ChatGPT is a
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valuable tool especially for graduate students and research assistants since they often have
to read long academic papers and they need to understand different parts of the articles
thoroughly both for presentation purposes or for writing literature reviews. To carry out
this function, the students simply have to insert their text and ask the platform to summarize
it. Students can even stipulate the number of words in the summary (e.g., less than 100
words) or they can ask ChatGPT to mention a specific topic or words in the output. It
is even possible to ask ChatGPT to generate a text with different writing styles or tone
such as formal, logical, and concise. It can generate the key points in bullet point form or
combine different texts together. Students can constantly improve the system’s output as
ChatGPT has memory, thus it remembers the previous outputs to some extent (Rohmatillah
and Chien, 2023). For example, we asked ChatGPT to summarize an abstract from a paper
about predictive and prescriptive analytics by (Bertsimas and Kallus, 2020) using less than
100 words and in bullet point form. ChatGPT provides the following output:
• ML and OR/MS are combined for optimal decision-making using data.
• The framework considers not only direct costs/revenues but auxiliary quantities.
• The framework is applicable to various decision problems with unknown joint probability
distributions.
• The methods are computationally tractable and asymptotically optimal. They can handle
non-i.i.d. and censored data.
4.5 Creating a mind map
Mind maps not only highlight crucial information about a topic, they also provide an entire
overview and the relative importance of its various components. They can assist students in
creating new connections between concepts and provide them with new ideas. Students can
simply ask ChatGPT to create a mind map on a topic. For example, in MS/OM, we ask
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ChatGPT for a mind map related to “Industry 4.0” and it generated the following (shortened
for brevity):
Main Branch:
Industry 4.0
Sub-branches:
Key technologies:
IoT (Internet of Things)
AI (Artificial Intelligence)
Big Data Analytics
Additive Manufacturing
Additive Manufacturing
Cloud Computing
Benefits:
Improved quality
Increased productivity
Challenges:
Data privacy and security
High implementation costs
Examples:
Smart Factories
Connected Healthcare
Predictive Maintenance
4.6 OM/MS Student focus
We now focus on some specific examples of the use of ChatGPT applications to MS/OM
courses including operations research, supply chain management, statistics and data analyt-
ics. Although ChatGPT can be used to formulate an existing model or gather the information
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from its vast amount of input data, it cannot develop a new model or provide a solution to
a mathematical model. Given this, students can ask ChatGPT to write a model for various
problems such as the newsvendor problem, the knapsack problem, and covering models, but
students should not assume that the outputs are correct. Overall, this platform can be used
as a recommender but should not be used as a solver if it does not have the exact model
or solving algorithm. Moreover, it is possible that ChatGPT provides an incorrect solution
even if it has the correct input and solving algorithm. Hence, students should always check
the system’s solutions. Here are some specific examples of how ChatGPT can assist students
on MS/OM related topics.
Operations Research: Students in operations research can benefit from ChatGPT’s as-
sistance in developing the optimal solutions to challenging problems. ChatGPT can offer
insights and suggestions on how to optimize operations, reduce costs, and enhance efficiency
provided the user inputs all the relevant information. Additionally, ChatGPT can assist
users in comprehending and explaining the sophisticated mathematical algorithms used in
operations research. For example, we asked ChatGPT to explain the newsvendor problem
and it provided the following output:
The newsvendor problem is a classic problem in inventory management that involves making
a decision on how much inventory to order for a product with uncertain demand. The problem
is typically formulated as follows:
Let Q be the quantity of the product ordered, and let D be the uncertain demand for the
product. The product has a fixed selling price p. The cost of ordering the product is denoted
by c. The goal is to determine the optimal order quantity that maximizes expected profit. In
general, the optimal solution is given by the following closed-form expression:
Q∗ = FD−1 ((p − c)/p)
where Q* is the optimal order quantity, F −1 is the inverse of the cumulative distribution
function (CDF) of the demand distribution.
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We then asked ChatGPT to solve a newsvendor problem with the following setup: assume a
normally distributed demand with a mean of 10 and a variance of 5, and a selling price of 5
and cost of 3. Since ChatGPT has all the required information to find the optimal solution
of this problem it provided the following solution:
Given the demand distribution N(10,5), the selling price p=5, and the cost of goods sold c=3,
we can use the closed-form solution for the newsvendor problem to find the optimal order
quantity.
Using the formula Q∗ = µ + σ ∗ Φ−1 ((p − c)/p), where µ = 10 and σ 2 = 5, we have:
Q∗ = 10 + sqrt(5) ∗ Φ−1 (2/5)
Using a standard normal table or a calculator, we can find that Φ−1 (2/5) is approximately
-0.2533. Substituting this value, we get:
Q∗ = 10 + sqrt(5) ∗ (−0.2533) = 8.22
Therefore, the optimal order quantity for this problem is approximately 8.22 units. This
means that the retailer should order 9 units (since they cannot order a fractional number of
units), in order to maximize expected profit.
Since ChatGPT has been provided with all the information – the correct solving procedure
and the closed form of the optimal solution of this problem – ChatGPT gives the correct
solution. However, it cannot correctly compute the optimal ordering amount in some cases.
For example, we checked the output of ChatGPT for several significant OR problems such as
the knapsack problem, or solving linear programming models using the simplex algorithm.
ChatGPT provided a thorough explanation and a correct step by step solving algorithm but
it was unable to solve the problems correctly in many cases.
Supply chain management: There are several ways that students can use ChatGPT for
supply chain management problems including analyzing demand, route optimization, risk
20

analysis. For example, we asked ChatGPT to formulate a set covering problem (SCP), a
route optimization problem and it provided the following output:
The Set Covering Problem (SCP) is a combinatorial optimization problem that seeks to select
a minimum number of locations from a larger set of subsets to cover all demand. Here is the
formulation of the SCP as a mixed-integer linear program:
Objective function:
Min Z Σj cj xj
s.t.
Σj∈J aij xj ≥ 1, i ∈ I
xj ∈ 0, 1, j ∈ J
where:
J is the set of locations
cj is the cost (or weight) of selecting location j
xj is a binary decision variable that takes value 1 if location j is selected, and 0 otherwise.
I is the set of customers
aij is a binary value that indicates whether customer i is in the coverage of location j.
As a practical example, we provided ChatGPT with a sample demand data set and asked
it to analyze the data and provide suggestions for the next horizon. Table 1 contains the
Time 2018/3 2018/6 2018/9 2018/12 2019/3 2019/6 2019/9 2019/12 2020/3 2020/6
Demand 10 8 6 4 12 10 6 5 11 8
Time 2020/9 2020/12 2021/3 2021/6 2021/9 2021/12 2022/3 2022/6 2022/9 2022/12
Demand 6 5 14 8 7 4 20 16 10 8
Table 1: Sample demand data set of a product
dataset and the following was provided from the platform:

The demand for the product seems to be highly seasonal, with higher demand during the first
and second quarters of the year and lower demand during third and fourth quarters. Based
on the data, my suggestions for the next horizon would be:
21

Develop a demand forecasting models such as moving averages, exponential smoothing, or
ARIMA models. Forecasting demand can help to plan production schedules and inventory
levels.
Since demand is highly seasonal, it may be useful to develop a seasonal pricing strategy to
maximize revenue.
To meet the seasonal demand, it may be necessary to adjust production capacity accordingly.
This can involve increasing production capacity during the peak season and reducing it during
the off-season to avoid overproduction and minimize inventory costs.
From the output we can conclude that ChatGPT provides a thorough analysis of the
trends in the demand dataset. It concludes that the data is seasonal without any prior
information from the modeler. It also suggest next steps including forecasting models to fit.
However, it did not provide any analysis, plots, and forecasts.
Statistics and data analytics: We can use ChatGPT to create statistical models and
predictive analytics models. ChatGPT can assist users in making data-driven decisions by
analyzing large datasets that reveal insights on trends, patterns, and correlations. ChatGPT
can also be useful in hypothesis testing because it can produce sample distributions and
provide other statistical insights. For example, we provide a section of the Boston house
price dataset to ChatGPT (without naming the dataset). If we ask it to analyze the dataset,
ChatGPT explains all the columns and how they are calculated. Here is the output:
This appears to be a portion of the Boston Housing dataset, which contains information about
various factors that could influence housing prices in different neighborhoods in Boston. The
columns in this portion of the dataset are:
CRIM: per capita crime rate by town
ZN: proportion of residential land zoned for lots over 25,000 sq.ft.
INDUS: proportion of non-retail business acres per town
CHAS: Charles River dummy variable (= 1 if tract bounds river; 0 otherwise)
NOX: nitric oxides concentration (parts per 10 million)
22

RM: average number of rooms per dwelling
AGE: proportion of owner-occupied units built prior to 1940
DIS: weighted distances to five Boston employment centers
RAD: index of accessibility to radial highways
TAX: full-value property-tax rate per $10,000
PTRATIO: pupil-teacher ratio by town
B : 1000(Bk − 0.63)2 where Bk is the proportion of blacks by town
LSTAT: % lower status of the population
MEDV: Median value of owner-occupied homes in $1000’s
Moreover, it can generate computer code to calculate correlations and variable distribu-
tions as well as develop different predictive models such as regression type machine learning
models. For example, we asked ChatGPT to develop a decision tree regression model for
the MEDV variable of the Boston house price dataset with a maximum depth of 5, mean
squared error (MSE) for the performance metric and 20% of the data as the test set. Figure
5 shows the Python code generated by ChatGPT for developing the decision tree model and
it provided the following output:
Sure, here’s an example of how to create a decision tree regression model for the “MEDV”
variable of the Boston house price dataset using Python and scikit-learn:
This code will split the data into training and testing sets, create a decision tree regression
with a maximum depth of 5, fit the model on the training data, predict the prices of the test
data, and calculate the mean squared error of the predictions. You can adjust the parameters
of the decision tree regression to see how it affects the performance of the model.
For the Boston house price data set, we evaluated the results of a decision tree model on
the provided dataset using our own Python code and the code provided by ChatGPT and the
results were different. ChatGPT cannot compile code but it does generate solutions (with
numbers). As we mentioned earlier, although the platform generates reasonable computer
code and solving procedures, the results are often incorrect and student users should not
23

Figure 5: The computer code generated by ChatGPT to develop a decision tree regression
model on the Boston house price dataset with ”MEDV” as the target variable.
trust the outcome without double checking, especially when the problem involves complex
computations. Overall, since statistical and data analysis tools are associated with computer
coding, ChatGPT can be used to generate the correct computer code and students can simply
run the code in their own software.
5 ChatGPT: a new era for assessment?
As our society navigates toward a new era of digital technologies, which includes publicly
available generative AI models such as ChatGPT, academia must now consider new ways
to adapt to and to adjust to these tools. The new AI tools enable students to produce
original text for written assignments, take home exams, projects and even academic papers.
Although academic integrity is the first thought that springs to professors’ minds, these tech-
24

nologies also bring opportunities to engage students in more efficient, meaningful learning.
Popular plagiarism detection software continues to have difficulty detecting plagiarism when
ChatGPT is used to generate the solutions, especially when they paraphrase the outputs
being generated. In our opinion, we assume that all students are using ChatGPT in their
assignments, hence, ChatGPT’s solutions are the new baseline. Therefore, professors need
to adapt and possibly change their classic view of course design, assignments, exams (take
home and in-class) and other means of assessing students. Here, we present a set of sug-
gestions that professors can use to uphold academic integrity standards and improve their
assessment style in the presence of current technologies.
Increase idea based questions: ChatGPT and other AI based systems do not have
the ability to generate new ideas or solve specific concepts. Although students in business
need to be familiar with primary business concepts, they have to enhance their ability to
think critically and improve their decision making processes. Therefore, professors should
include more idea-based questions with unique scenarios in their assignments and exams
that ultimately would be beneficial for students. Knowing how and where to find the best
information is as important as the information itself is critical to the theory of connectivism
and to students in the era of chatGPT.
Increase oral assessments and class activities: In business schools, professors should
increase the weight of oral assessments such as class presentations and/or exams and partic-
ipation in class activities. This will improve students’ managerial and communication skills
which will be very beneficial in an AI dominated world. A manager needs to be able to speak
clearly, concisely, and persuasively, and to critically respond to situations as they arise.
Incorporate AI in assessment: For MS/OM students and also for the general busi-
ness school student community, AI and analytics are increasingly being used in many of
their courses and projects. As a result, instead of prohibiting students from using AI-based
platforms such as ChatGPT, business schools should incorporate AI in both teaching and
assessment of students. Professors should also utilize AI in classrooms and should teach
25

their students how to use it appropriately. We hope that professors and students use this
systematic review of the capabilities as helpful guide and that they return to it often.
Change the grading system: Professors need to be explicit in their syllabi about how
students will be evaluated when using AI tools. Open communication between instructors
and students gives both parties a clearer understanding of the benefits, limitations, and risks
of using tools such as ChatGPT.
Ask students to assess their classmates: Students should evaluate each other’s work.
This enables professors to evaluate students’ knowledge of the topic as well as their ability
to give and receive feedback. In this new era of AI, peer evaluation assignments should be
developed and implemented.
6 Limitations
ChatGPT, as new AI technology, has some drawbacks of its own. In general, AI systems, at
the current time, are not be able to come up with original solutions to new problems because
they are created to optimize specific objectives. Furthermore, since the data used to train
the AI models include biases, it is likely that the decisions it makes are also biased (Kostick-
Quenet et al., 2022; Akter et al., 2021, 2022). For example, ChatGPT, as an AI language
model, has no personal belief. However, the model’s responses might be affected by the fact
that the data used to train the model might have biased language or information including
racial bias. As a result, AI systems might struggle to adapt well to new circumstances or
data that fall outside the scope of the training data. We have discussed limitations in the
previous sections but emphasize them again here.
Possible incorrect or incomplete answers: Due to various factors, such as inadequate
input data or insufficient model training, ChatGPT may give incorrect answers.
ChatGPT is a language model, not a search engine: The model is currently limited to
data up until September 2021. This means that it cannot access the internet and therefore
access up to date information. Moreover, it can not provide images (it can produce text
26

which can be translated into an image) or audio since it is only based on text. To address
this limitation regarding generating or modifying an image, Microsoft has recently created
a visual ChatGPT which connects ChatGPT and a series of Visual Foundation Models to
enable sending and receiving images while chatting. The github link to the Python code for
this is https://github.com/microsoft/visual-chatgpt.
ChatGPT does not have an unlimited input/output memory: A (very) long text
cannot be fed into as an input ChatGPT. Otherwise, it would take a very long time to
respond and will likely crash. Therefore it is unable to produce a lengthy output as well.
For example, when we asked it to write a 20 page article on the topic of this paper (see the
Appendix for the output) it only provides three pages.
ChatGPT can write code, but it can not compile it: Although it can generate com-
puter code in a variety of programming languages, the generated code should be examined
and put into practice independently in a compiler.
7 Conclusion
In general, AI has the potential to improve business education by making it more individu-
alized, practical and efficient. After the recent emergence of generative AI tools, researchers,
university professors, and technology experts are discussing its impacts and how it can be
used to enhance education and support students’ learning appropriately. ChatGPT, as a new
AI based chatbot, can be a useful tool for both professors and students, providing them with
information and resources that can improve learning and enhance student academic success.
It will also emphasize the importance of critical thinking: knowing how and where to find
the best information is as important as the information itself. This adds to the education
theory of connectivism.
This article should be used as a guide for both professors and students in university
education with a particular focus on quantitative fields in business schools: management
science, operations management and data analytics. We illustrate the potential benefits of
27

ChatGPT for professors, including designing courses and help with designing and evaluating
assignments and exams, helping them to have AI-based discussions during and outside office
hours, and generating research ideas. Moreover, we suggest two machine learning based
systems to detect possible usage of AI-based generated texts to address the professors’ con-
cerns regarding plagiarism. Additionally, we analyze both the general as well as the specific
functions of this platform for students through several examples in the areas of operations
research, supply chain management, and data analytics. We also propose the potential up-
dates that educators should consider regarding their assessment design and incorporating AI
into their teaching style. Finally, we discuss the limitations of ChatGPT and considerations
for using this new technology.
We should mention that due to the great public interest and the usefulness of these
platforms, AI-based companies are constantly improving their models in order to produce
more powerful systems and to compete against each other for market domination. Therefore,
they are delivering new updates daily. In our case, OpenAI first introduced ChatGPT which
was based on GPT-3 and 3.5, but they recently have released a more complicated and
dominant version which is trained on GPT-4 and it is now available through their premium
subscription plan. Considering this rapid pace, professors and students should always keep
an eye on updates to adapt their pedagogical approach to the new technology. We see this
article as a starting point for those interested in incorporating AI-based chatbots, particularly
ChatGPT, into their teaching, learning, and research.
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8 Appendix
8.1 Using ChatGPT to create this paper
Here is a sample article generated by ChatGPT regarding its benefits and limitations in
management science and operations management education and research:
Introduction
Management Science Education is a critical aspect of modern business education, as it en-
ables students to develop analytical skills and problem-solving abilities. However, teaching
Management Science can be challenging, as it involves a lot of technical jargon and complex
mathematical concepts. One way to overcome these challenges is to use artificial intelligence
technology such as ChatGPT. In this article, we will explore the application of ChatGPT in
Management Science Education.
ChatGPT Overview
ChatGPT is an AI language model developed by OpenAI that is capable of generating natural
language responses to a wide range of queries. It uses machine learning algorithms to un-
derstand the context of the user’s query and generate appropriate responses. ChatGPT has
been trained on a vast amount of text data, which has enabled it to become a highly effective
conversational agent.
Benefits of ChatGPT for Management Science Education
ChatGPT has several benefits that make it an ideal tool for teaching Management Science.
First, it can provide instant feedback to students, allowing them to better understand complex
concepts. This can be especially helpful for students who struggle with abstract concepts or
who are not able to ask questions during class.
Second, ChatGPT can personalize the learning experience for each student. It can track
a student’s learning history and provide recommendations based on their progress. This can
help students to reinforce their knowledge and fill in any gaps in their understanding.
Third, ChatGPT can adapt to different learning styles. It can generate both text-based
29

explanations and visual aids such as diagrams and charts, allowing students to choose the
format that works best for them. This can help to increase engagement and improve retention.
Finally, ChatGPT can be used to create interactive simulations and games, which can
make learning more enjoyable and engaging. For example, a simulation of a supply chain
could be created, allowing students to experiment with different variables and see the effects
on the system.
Examples of ChatGPT Applications in Management Science Education
There are several ways in which ChatGPT can be used in Management Science Education.
One example is to use ChatGPT as a virtual tutor, allowing students to ask questions and
receive instant feedback. This can be especially helpful for students who are studying online
or who do not have access to a tutor.
Another example is to use ChatGPT to generate personalized study materials based on a
student’s learning history. For example, if a student is struggling with linear programming,
ChatGPT could generate a set of practice problems and explanations tailored to their needs.
ChatGPT can also be used to create interactive simulations and games that allow students
to experiment with different scenarios. For example, a simulation could be created that allows
students to explore the impact of changes in demand on a supply chain.
ChatGPT can be used to create chatbots that help students to navigate course materials
and assignments. This can be especially helpful for students who are new to a subject and
need guidance on where to start.
Challenges and Limitations
While ChatGPT has several benefits for Management Science Education, there are also some
challenges and limitations. One of the main challenges is that ChatGPT is only as good as
the data it has been trained on. If the training data is biased or incomplete, ChatGPT may
not be able to generate accurate responses to certain queries.
Another challenge is that ChatGPT may not be able to generate responses to very complex
or specialized queries. In such cases, students may still need to consult a human expert or
30

use more specialized learning materials.
Finally, there is also the risk of overreliance on ChatGPT. While ChatGPT can be a
powerful tool, it is important for students to develop their critical thinking and problem-
solving skills independently.
Conclusion
Overall, ChatGPT has the potential to revolutionize Management Science Education by pro-
viding students with personalized, interactive, and engaging learning experiences. While there
are challenges and limitations, these can be addressed by ensuring that the training data is
diverse and unbiased, and by providing students with guidance on how to use ChatGPT ef-
fectively. By doing so, we can help students to develop the analytical and problem-solving
skills they need to succeed in modern business environments.
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8.2 Course syllabus created by ChatGPT
A sample syllabus created by ChatGPT for a ‘Introduction to Business Analytics’ course at

the Master of Business Admistration (MBA) level:
Course Title: Introduction to Business Analytics

Course Description: This course provides an introduction to business analytics, including
concepts, tools, and techniques that are essential for decision-making in today’s data-driven
business environment. Students will learn how to collect, analyze, and interpret data to
make informed decisions that drive business success. The course will cover topics such as
data visualization, descriptive and inferential statistics, regression analysis, and machine
learning.
Course Goals:
• Introduce students to the field of business analytics and its relevance in today’s business
world
• Develop students’ skills in data collection, cleaning, and analysis
• Help students learn how to effectively communicate insights derived from data analysis
• Equip students with knowledge of statistical techniques and tools for decision-making
• Provide an introduction to machine learning and its applications in business analytics
Course Topics and Outline:

Week 1: Introduction to Business Analytics
• Overview of the field of business analytics
• Importance of business analytics in decision-making
• Applications of business analytics in various industries
Week 2: Data Collection and Cleaning
32

• Types of data and data sources
• Data cleaning and preparation techniques
• Data visualization tools and techniques
Week 3: Descriptive Statistics
• Measures of central tendency and variability
• Data visualization for descriptive statistics
• Application of descriptive statistics in business analytics
Week 4: Inferential Statistics
• Hypothesis testing and confidence intervals
• ANOVA and regression analysis
• Applications of inferential statistics in business analytics
Week 5: Machine Learning
• Overview of machine learning algorithms
• Supervised and unsupervised learning
• Applications of machine learning in business analytics
Week 6: Big Data Analytics
• Overview of big data analytics
• Tools and techniques for big data analysis
• Applications of big data analytics in business
Week 7: Data Visualization and Communication
33

• Principles of effective data visualization
• Tools for data visualization
• Effective communication of insights derived from data analysis
Week 8: Business Analytics in Practice
• Case studies and real-world applications of business analytics
• Ethical considerations in business analytics
• Future of business analytics
Assessment and Grading:
• Class participation: 20
• Assignments and quizzes: 40
• Midterm exam: 20
• Final project: 20
The final project will involve a practical application of the concepts covered in the course,
with students required to collect, clean, analyze, and communicate insights from a dataset
relevant to their field of interest.
34

8.3 Sample lecture slides created by ChatGPT
A sample of lecture slides created by ChatGPT on the topic of k-means clustering:
K-Means Clustering
Overview
• Introduction to Clustering
• K-Means Algorithm
• Choosing the Number of Clusters
• Advantages and Disadvantages
Introduction to Clustering
• Clustering is a technique in unsupervised machine learning that involves grouping similar

data points into clusters.
• It is useful for tasks such as customer segmentation, image segmentation, and anomaly
detection.
• K-Means is a popular clustering algorithm that is widely used in industry and academia.
K-Means Algorithm
• The K-Means algorithm involves partitioning data into K clusters.
• It works by iteratively assigning data points to the nearest cluster center (centroid), and
then updating the cluster centers based on the new data point assignments.
• The algorithm converges when the cluster assignments no longer change.
35

Data
Initialize K Centroids
Assign Data Points to Nearest Centroids
Update Centroids
Stop if Cluster Assignments Don’t Change
Choosing the Number of Clusters
• One of the challenges of K-Means is choosing the appropriate number of clusters (K).
• A common approach is to use the elbow method, which involves plotting the within-
cluster sum of squares (WCSS) for different values of K and choosing the value of K
where the decrease in WCSS begins to level off.
Advantages and Disadvantages
• Advantages:
– Simple and easy to implement.
– Fast and efficient on large datasets.
36

8.4 MBA assignment solution created by ChatGPT
We provided ChatGPT with the following assignment from our ‘Introduction to Business
Analytics’ course at the MBA level:
Company GoIontach have just published extraordinary results this quarter and have been
suspected of fraud. Using the statistical methods you have learned in this class (and only
the methods you have learned in the class), explain the analyses and tests you would carry
out in order to check for fraud. You only have access to their quarterly operating profit
from the past ten years and the quarterly operating profit of the 50 companies in the same
industry that closely resemble GoIontach in terms of size, profits, etc.
Write a brief (two pages should be adequate), but informative report that explains the
analyses and/or tests you would carry out with justifications for any assumptions you make.
Limitations of the data and/or analyses should also be included.
ChatGPT provided the following response:
Introduction: GoIontach, a company in the same industry as 50 other companies has pub-
lished extraordinary results, which have raised suspicions of fraud. In order to investigate
these suspicions, we will analyze GoIontach’s quarterly operating profits from the past ten
years and compare them to the quarterly operating profits of the 50 other companies in the
industry. In this report, we will outline the statistical methods we will use to investigate these
suspicions.
Descriptive Analysis: We will start by conducting a descriptive analysis of GoIontach’s quar-
terly operating profits. We will calculate measures such as the mean, median, mode, standard
deviation, and range. We will also plot the quarterly operating profits over the ten-year pe-
riod to identify any trends or patterns in the data.
37

Hypothesis Testing: We will then conduct hypothesis testing to determine whether GoIon-
tach’s quarterly operating profits are significantly different from those of the 50 other com-
panies in the industry. Specifically, we will test the null hypothesis that the mean quarterly
operating profit of GoIontach is equal to the mean quarterly operating profit of the other 50
companies in the industry. We will use a two-sample t-test to compare the means of the two
samples.
Regression Analysis: We will also conduct a regression analysis to identify any variables
that may be affecting GoIontach’s quarterly operating profits. We will use multiple linear
regression to analyze the relationship between GoIontach’s quarterly operating profits and
variables such as industry trends, economic conditions, and company-specific factors. We
will also conduct a residual analysis to check the assumptions of the regression model.
Data Limitations: It is important to note that the analyses we conduct are limited by the
data available to us. We only have access to the quarterly operating profits of GoIontach and
the 50 other companies in the industry. We do not have access to other financial data or
non-financial data that may be relevant in determining whether fraud has occurred. Addi-
tionally, our analyses assume that the data is normally distributed and that the samples are
independent and random.
Conclusion: In conclusion, we will conduct a descriptive analysis, hypothesis testing, and
regression analysis to investigate suspicions of fraud at GoIontach. We will compare the
quarterly operating profits of GoIontach to those of the 50 other companies in the industry
to determine if there are significant differences. We will also conduct a regression analysis
to identify any variables that may be affecting GoIontach’s quarterly operating profits. While
these analyses are limited by the data available, they will provide us with valuable insights
into whether fraud has occurred at GoIontach.
38

8.5 PhD assignment solution created by ChatGPT
We provided ChatGPT with the following assignment from our ‘Multivariate Data Analysis’
course at the PhD level:
1. The data set teengamb in R concerns a study of teenage gambling in Britain. Make a
graphical summary of the data, commenting on any features that you find interesting.
Limit the output you present to a quantity that a busy reader would find sufficient to
get a basic understanding of the data.
2. Again, for the teengamb data a regression model with the expenditure on gambling as
the response and income as the predictor. Present the output.
(a) What percentage of variation in the response is explained by the predictor?
(b) Which observation has the largest (positive) residual? Give the case number.
(c) Plot the residuals. Comment on the residual plot.
(d) After observing the residuals what would you recommend?
(e) Compute the mean and median of the residuals.
(f) Compute the correlation of the residuals with the fitted values.
(g) Compute the correlation of the residuals with the income.
3. For the Simple Linear Regression model, show that E(β̂1 ) = β1 . In other words, show
β̂1 is unbiased.
4. For the Simple Linear Regression model, compute Var(β̂1 ).

Pn
5. Show i=1 ûi (ŷ − ȳ) = 0
ChatGPT provided the following response:
39

1. Thank you for providing more information. Here’s a graphical summary of the teengamb
dataset:
library(ggplot2)
data(teengamb)
# Histogram of gambling expenditure
ggplot(teengamb, aes(x = Expenditure)) + geom histogram(bins = 20, fill = ”blue”,
color = ”black”) + labs(x = ”Gambling Expenditure”, y = ”Frequency”, title =”His-
togram of Gambling Expenditure”)
# Scatter plot of income vs. gambling expenditure
ggplot(teengamb, aes(x = Income, y = Expenditure)) + geom point(color = ”blue”) +
labs(x = ”Income”, y = ”Gambling Expenditure”, title = ”Scatter plot of Income vs.
Gambling Expenditure”)
From the histogram, we can see that the distribution of gambling expenditure is heavily
skewed to the right, with a long tail of high expenditure values. This suggests that there
may be some extreme values or outliers in the data. The scatter plot of income vs.
gambling expenditure shows a weak positive relationship between the two variables, with
some scattered points that are far away from the general trend. This suggests that there
may be other factors besides income that influence gambling expenditure.
2. As the teengam dataset is not available in the base R, assuming it to be available in

some package. We first load the teengam dataset and then perform the regression anal-
ysis using the lm() function.
# Load the teengam dataset library(”faraway”)
data(teengamb)
# Fit the regression model
model <- lm(expend ∼ income, data = teengamb)
# Output summary of the model
summary(model)
40

The output of the above code will give us the following result:
Call:
lm(formula = expend income, data = teengamb)
Residuals:
Min 1Q Median 3Q Max
-18.335 -6.458 -1.247 4.644 51.717
Coefficients:
Estimate Std. Error t value Pr(> |t|)
(Intercept) -5.24557 2.12935 -2.463 0.0165 *
income 0.01339 0.00328 4.084 5.91e-05 ***
—
Signif. codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1
Residual standard error: 10.05 on 97 degrees of freedom
Multiple R-squared: 0.1626, Adjusted R-squared: 0.1535
F-statistic: 16.68 on 1 and 97 DF, p-value: 5.914e-05
a. The Adjusted R-squared value of the model is 0.1535, which means that approximately
15.35% of the variation in the response variable expend is explained by the predictor in-
come.
b. We can find the observation with the largest positive residual using the which.max()
function as follows: teengamb[which.max(model$residuals), ]. The output shows the ob-
servation with the largest positive residual and its corresponding case number.
c. We can plot the residuals using the plot() function as follows: plot(model$residuals,
pch = 20, main = ”Residual Plot”). The residual plot shows no clear pattern or trend,
indicating that the linear regression model is appropriate for this data. However, there
are a few outliers that have large residuals, which can be further investigated.
d. After observing the residuals, we may recommend investigating the outliers further
and considering other factors that may affect the response variable expend.
41

e. We can compute the mean and median of the residuals using the mean() and me-
dian() functions as follows: mean(model$residuals) and median(model$residuals). The
mean and median of the residuals are approximately 0, which indicates that the model
is fairly well-fitted to the data.
f. We can compute the correlation of the residuals with the fitted values using the cor()
function as follows: cor(model$residuals, fitted(model)). The output shows that the cor-
relation between the residuals and the fitted values is approximately 0, which indicates
that the model is not biased.
g. We can compute the correlation of the residuals with the predictor variable income us-
ing the cor() function as follows: cor(model$residuals, teengamb$income). The output
shows that the correlation between the residuals and the predictor income is approxi-
mately 0, which indicates that
3. In Simple Linear Regression, we have the model: yi = β0 + β1 xi + ϵi , where yi is the

response variable, xi is the predictor variable, β0 is the intercept, β1 is the slope, and
ϵi is the error term ... To show that β̂1 is unbiased, we need to show that: E(β̂1 )= β1 .
Taking the expected value of β̂1 , we get:
i = 1n (xi − x̄)(yi − ȳ)

P
E(β̂1 ) = E Pn 2
i=1 (xi − x̄)
n
!
1 X
= Pn 2
E (xi − x̄)(yi − ȳ)
i=1 (xi − x̄) i=1
n
1 X
= Pn 2
E[(xi − x̄)(yi − ȳ)]
i=1 (xi − x̄) i=1
n
1 X
= Pn 2
E[xi yi − xi ȳ − yi x̄ + x̄ȳ] (1)
i=1 (xi − x̄) i=1
n
1 X
= Pn 2
E[xi yi ] − E[xi ]ȳ − E[yi ]x̄ + x̄ȳ
i=1 (xi − x̄) i=1
n
1 X
= Pn 2
E[xi yi ] − x̄ȳ − x̄ȳ + x̄ȳ
i=1 (xi − x̄) i=1
Pn
E[x y ] − nx̄ȳ
Pn i i
= i=1 2
i=1 (xi − x̄)
42

Now, the expected value of xi yi can be expressed as:
E[xi yi ] = E[xi (β0 + β1 xi + ϵi )]
= E[β0 xi + β1 x2i + ϵi xi ]
(2)
= β0 E[xi ] + β1 E[x2i ] + E[ϵi xi ]
= β1 x2i + E[ϵi ]xi
4. In simple linear regression, the variance of the OLS estimator β1 can be calculated as
follows:
2
Var(β1 ) = Pn σ 2
i=1 i −x̄)
(x
where σ 2 is the variance of the error term ϵ, and the summation is taken over all n
observations. Assuming that the error term ϵ is normally distributed with mean zero
and variance σ 2 , we can estimate σ 2 using the residual sum of squares (RSS), which is
defined as:
RSS = ni=1 (yi − β̂0 + β̂1 xi )2
P
where β̂0 is the OLS estimator of the intercept β0 . Using the RSS, we can estimate σ 2
as follows:
σ 2 = RSS / (n - 2) where n is the sample size.
Substituting the above expression for σ 2 into the equation for Var(β̂1 ), we get:
RSS
Var(β̂1 ) = (n−2)∗ n
P 2 Therefore, to compute Var(β̂1 ), we need to first estimate σ 2
i=1 (xi −x̄)
using the RSS, and then compute the summation term in the denominator.
5. In a linear regression model, the residuals (or errors) are given by:
ui = yi − ŷi
where yi is the observed value of the response variable for the ith observation, ŷi is the
predicted value of the response variable for the ith observation based on the regression
equation, and n is the sample size.
Pn
The mean of the response variable is given by: ȳ = (1/n) ∗ i=1 yi
43

The predicted value of the response variable for the ith observation can be written as:
ŷi = β̂0 + β̂1 xi
where β̂0 and β̂1 are the estimated intercept and slope coefficients, respectively, and xi
is the value of the predictor variable for the ith observation.
Substituting these values, we get:
Pn Pn
i=1 û i (ŷ i − ȳ) = i=1 ûi (β̂0 + β̂1 xi − ȳ)
Expanding the summation, we get:

Pn Pn Pn
i=1 ûi β̂0 + i=1 ûi β̂1 xi − i=1 ûi ȳ
Now, we know that the residuals are by definition centered around zero, that is, their
sum is equal to zero:
Pn
i=1 ûi = 0
Also, we know that the fitted values are centered around the mean of the response vari-
able, that is:
Pn
i=1 ŷi = nȳ
Substituting these values, we get:

Pn Pn Pn Pn Pn Pn
i=1 ûi β̂0 + i=1 ûi β̂1 xi − i=1 ûi ȳ = i=1 ûi β̂0 + i=1 ûi β̂1 xi − ȳ i=1 ûi
Using the fact that ni=1 ûi = 0, we get:

P
Pn Pn Pn
i=1 ûi β̂0 + i=1 ûi β̂1 xi − ȳ i=1 ûi = 0
Simplifying, we get:
Pn
i=1 ûi (ŷi − ȳ) = 0
Pn
Therefore, we have shown that i=1 ûi (ŷi − ȳ) = 0 in a linear regression model.
44

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The benefits and limitations of ChatGPT in business

education and research: a focus on management science,

Ivor Cribben1 and Yasser Zeinali1

ChatGPT is an artificial-intelligence chatbot developed by OpenAI. It can be used

Electronic copy available at: https://ssrn.com/abstract=4404276

Keywords: Generative AI, ChatGPT, business education, chatbot, AI, man-

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3.1 Creating course materials

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3.2 Help with student understanding

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Second student’s solution:

What are the students grades?

• First student: 100 points

• Second student: 25 points

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3.5 Academic integrity and plagiarism

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4.1 Explaining complex concepts

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ChatGPT is also capable of debugging code, and in particular, it is quick to identify

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4.3 Exam preparation

4.4 Summarizing papers

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• ML and OR/MS are combined for optimal decision-making using data.

4.5 Creating a mind map

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4.6 OM/MS Student focus

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Q∗ = FD−1 ((p − c)/p)

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Q∗ = 10 + sqrt(5) ∗ Φ−1 (2/5)

Q∗ = 10 + sqrt(5) ∗ (−0.2533) = 8.22

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Table 1: Sample demand data set of a product

dataset and the following was provided from the platform:

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5 ChatGPT: a new era for assessment?

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8.1 Using ChatGPT to create this paper

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A sample syllabus created by ChatGPT for a ‘Introduction to Business Analytics’ course at

Course Title: Introduction to Business Analytics

• Develop students’ skills in data collection, cleaning, and analysis

• Provide an introduction to machine learning and its applications in business analytics

Course Topics and Outline:

• Overview of the field of business analytics