Abstract: Remanufacturing is a significant manner to treat returned product.This paper studies a simple decision model of remanufacturing with product substitution.There are high and low quality level remanufacturedproducts and the remanufacturedproduct with high quality level can be sold by the price of remanufactured product with low quality level.Finally,a simulation example shows the advantage of the strategy with product substitution comparing with the strategy without product substitution.