Case: Lucas Construction, Inc.This case was originally written by Dr$.$ Hokey Min based on an actual situation. It has been substantially modified to keep the identity of the company confidential.A Need for Global SourcingLucas Construction, Inc., is one of the world's most significant construction and civil engineering companies. Its headquarters are located in Atlanta, Georgia. As a leading construction company, it is involved in constructing many logistics infrastructures such as railroads, highways, oil pipelines, bridges, shipyards, and airport terminals.Under the new leadership of Steve Landrieu, the company started diversifying and expanding its business activities, including constructing office buildings, warehouses, theatres, and schools worldwide. Typically, Lucas Construction handles a project from its site planning and design to its construction and maintenance. Due to its do$-$it$-$all, one$-$stop service offering, Lucas Construction is responsible for sourcing all the construction materials such as concrete, plaster, tile, wire ropes and cables, structural steel beam, bricks, plumbing fixtures, studs, plywood, treated lumber, so on$.$ Its construction operation is a continuous, seven$-$days$-$a$-$week process; therefore, its interruption can result in a severe delay in the project and substantial financial loss. That is to say, the timely acquisition of needed construction materials is a key to its business success. Lucas Constructions purchasing department is organized into four divisions:Commodity and operating materialsCapital equipment $($e$.$g$.,$ earth$-$moving equipment$)$Replacement parts and components for capital equipmentMRO $($maintenance$,$ repair, and operating$)$ suppliesThe commodity and operating materials division is the functional four in purchase order activity.Quality Failure at the SourceLucas Construction recently won a bid for building a new $600,000$ square$-$feet mega$-$ warehouse for a fast$-$growing third$-$party logistics $(3$PL$)$ company in a suburb of Atlanta in Fulton County. Based on the bill of materials $($BOM$)$ and blueprint drawings for the warehouse on file, Lucas Constructions purchasing department has a listof specific building materials required for warehouse construction. One of the vital building materials includes treated lumber. However, the purchasing manager, Sandy Wheeler, primarily responsible for buying treated lumber, noticed a substantial shortage due to booming construction activities along the Atlanta Beltline corridor. If treated lumber is available, its price is excessively high. So$,$ Sandy believes that the local sourcing option is not a good idea. After consulting with her boss and colleagues, Sandy bought treated lumber from a building material supplier, Pearl Trade Co$.,$ Ltd$,$ in Foshan, China. To avoid construction delays, Sandy hurriedly ordered hundreds of lumbers from Pearl, which promised on$-$time delivery of lumber and guaranteed its quality. When the rated lumber finally arrived in the Port of Long Beach, Sandy was notified by the U$.$S$.$ Customs Office that two$-$thirdsof lumber shipped by Pearl were infested with insects so that the U$.$S$.$ Customs Office would put a hold on its unloading. Sandy never thought insects could attack that treated lumber. Sandy was further puzzled by the fact that the lumber sent by Pearl showed a clear mark indicating the IPPC $($International Plant ProtectionConvention$)$ certification. Knowing that the lumber should be sent to the job site within three weeks to avoid severe construction delays and subsequent penalties, Sandy was panicked and bewildered by this unexpected setback.Urgent Plan BSandy picked up a phone in the middle of the night and called Pearls salesman, who could barely speak English, then threatened to take legal action against Pearl unless replacement lumber could be shipped via air express in two weeks. Pearls salesman sounded unfazed by Sandys strong warning and claimed that insect infestation happened more than likely during the long transit. Sensing the urgency, Sandy checked with the local supplier, Smokey Lumber, with whom she has done business in the past. Smokey was a reliable supplier with a proven record of quality excellence but quoted a price three times higher than Pearls. This series of unexpected events have left Sandy speechlessshe does not know what to say and do next. Now, her job may be on the line. What is Sandy supposed to do now?