Abstract: Based on the consumer utility model, the monopoly's buy-back and remanufacturing decisions under the second-hand market are discussed in a two-period dynamic model. Several conclusions are obtained. First of all, only if the manufacturing cost and remanufacturing cost are lower than the critical values, the durable goods monopoly should choose the buy-back and remanufacturing strategy. Secondly, the remanufacturing strategy not only cannibalize sales of the second-hand market, but also lead to the market growth. Moreover, the higher the manufacturing cost is, the more obvious the cannibalization effect and growth effect are. The monopoly can gain more profits by increasing the consumer's willingness to pay for the remanufacturing durable goods and the remanufacturing cost savings.

Key words: durable goods, the second-hand market, buy-back, remanufacturing