Abstract: Waste product take-back is growing regulated by countries to protect the environment. The problem of collection and remanufacturing decision making based on premium and penalty mechanism is studies under manufacture competition environment in this paper. Two cases are discussed, one case is that only one manufacturer implements collection and remanufacturing,the other one is that two manufacturers implement collection and remanufacturing. Several conclusions are gained. For the manufacturer who collects and remanufactures old products, collection rate increases under premium and penalty mechanism. No matter the manufacturer collects and remanufacturers old products or not, new product's price is lower than the price without the premium and penalty mechanism. The consumer can benefit from the mechanism. The competition between manufactures is beneficial to the mechanism for leading manufacturers to increase collection rates. The collection rate increases with the remanufacturing rate. No matter the other manufacturer collects and remanufacturers old products or not, the profit of the remanufacturer who collects and remanufactures old products increases with the premium and penalty degree, and decreases with the target collection rate's increasing, furthermore, with the increase of the degree, the decrease trend become more obvious. Above conclusions are proved by the numerical analysis.

Key words: competition, premium and penalty mechanism, collection and remanufacturing, collection rate