Abstract: Many suppliers and manufacturers allow a third-party recycler to perform recycling operations of Waste Electrical and Electronic Equipment, then encourage the third-party recycler to disassemble these end-of-life products either for products remanufacturing or parts remanufacturing, which is of great importance in reducing environment pollution and promoting the reuse of resources. In this paper, recycling and pricing strategies of the third-party recycler are investigated in a closed-loop supply chain with two-echelon remanufacturing. Stackelberg game models of a closed-loop supply chain with two-echelon remanufacturing consisting of one supplier, one manufacturer, and one third-party recycler are developed. The returns price, effective recovery ratio, and recycling effort level are integrated within a modeling framework.The positive effect of two-echelon remanufacturing on effective utilization of the invalid parts,and its negative effect on the probability that the third-party recycler should handle the dismantling cost,are explicitly modeled. By the comparison of equilibrium decisions and profits under two remanufacturing strategies, it is found that (i) high quantity and the effective recovery ratio will contribute to the third-party recycler's profit; and (ii) remanufacturing strategies can reduce the wholesale price and sale price, and promote the demand, while the profits may not be improved; and (iii) when the effective recovery ratio under product remanufacturing is higher than that under two-echelon remanufacturing, recyclers' decisions and profit mainly depend on invalid parts' recycling price. Recyclers' decisions and profit under product remanufacturing turns better if the recycling price of invalid parts is sufficiently low. Otherwise, the recyclers' decisions and profit under two-echelon remanufacturing turns better. Moreover, numerical studies are employed to gain more intuitive insights. The field of two-echelon remanufacturing strategies are extended in the closed-loop supply chain and some new results are found. These new results may propose some constructive suggestions for the dominant third-party recycler in the reverse logistics.

Key words: WEEE, two-echelon remanufacturing, third-party recycler, effective recovery ratio, game theory