Abstract: Under the assumptions that there are adequate recycling materials and, in the remanufacturing process, the quality of return parts fall off, a study is conducted on how a manufacturer makes the quality selection of the remanufactured products, and how to determine the optimal price of the new products and remanufactured products. It is shown that the variation of quality of the nonremanufactured part has significant effect on the demands of new products and remanufactured products. With the quality continuously improved for the remanufactured products, the demands for new products keep decreasing, while it continuously increases for remanufactured products. The higher the quality of the remanufactured products is, the less demand there is for the new products. This process will continue until the remanufactured products occupy the market. In this process, the increase of the manufacturers profit is fast at first and then slows down. Finally, the manufacturer gains the largest profit when the market is totally occupied by the remanufactured products.

Key words: remanufacturing, remanufactured products, quality selection