Abstract: In a market consisting of both manufacturer and remanufacturer, consumers have different willingness to pay for new and remanufactured products from manufacturer and remanufactured products from remanufacturer. Against this backdrop, a study is conducted on the impacts of legislation on corporate profits, consumer surplus, environmental benefit and social welfare when formulating the constraint situation that the manufacturer should recycle the minimum proportion of new products. The results have shown that recycling rates tend to be strict, reducing manufacturer’s new product yields and increasing their prices. At the same time, the increasing recycling ratio may result in fewer remanufactured products on the market. In addition, environmental benefits are positively related to minimum recovery targets. Numerical analysis illustrates that the higher the social consumer’s willingness to pay for remanufactured products, the better the social welfare. By comparing with the recycling fund policy, the minimum recovery rate has a more significant effect on the improvement of environmental benefits.

Key words: policy constraints, remanufacturing, production decisions, market competition