Abstract
Remanufacturing goods to save cost and to reduce consumption of natural resources has been a broadly discussed concept in sustainable operations management. However, few researches investigate the role of product modularity in remanufacturing. In this research we formulate a two-period mathematical model to analyze how company should design the degree of modularity of its products in a remanufacturing setting while new and remanufactured products cannibalize each other’s market. Consumer tolerance and original saving of remanufacturing toward remanufactured product are used as factors to determine degree of modularity and other operational decision variables such as price and recycle quantity. The impact of government regulation is also discussed.