QUESTION $5$

Company A uses exponential forecasting as its forecasting method. The company has analyzed its demand pattern and has detected a trend: Demand is increasing each month, and that trend is expected to continue. The company is currently forecasting using an alpha $($smoothing constant$)$ of $0\mathrm{.}2.$ The company wants the forecast to more closely match the most recent demand, and forecasters will need to adjust alpha $($the smoothing constant$)$ to calculate the new forecast. Should the forecasters use a higher alpha or should they use a lower alpha?

a$.$ They should use a higher alpha to calculate a forecast that follows the trend more closely.

b$.$ They should use a lower alpha to calculate a forecast that follows the trend more closely.