Abstract:Outsourcing will be helpful for manufacturers to reduce collecting cost of used products and to im-prove the flexibility of remanufacturing. This paper presents outsourcing decision-making models of used prod-ucts collection with and without incentive contracts based on game theory. Critical outsourcing cost is derived to make outsourcing decisions of collecting waste products. The effects of the unit cost savings of remanufactur-ing products on the wholesale price,retail price,returns rate,manufacturer’s profit and critical outsourcing costs are compared with examples applied to the two models,and we find that outsourcing collection of waste products with incentive contracts is useful to increase the returns rate and improve the manufacturers' benefit.