In a previous paper the author discussed an EOQ model in which the stationary demand can be satisfied by newly made products and by repaired used products. In the modelled situation some share of the used products is collected and later repaired; the other products are disposed outside according to some waste disposal rate. In the present paper this model is extended to the case of variable setup numbers n and m for production and repair within some collection time interval. First, for a fixed waste disposal rate the cost optimal setup numbers and the minimum cost are determined. Secondly, the minimum cost is analysed as a function of this rate and it is shown to be convex for small and medium waste disposal rates and to be concave for large rates. Thirdly, the existence and generation of cost optimal waste disposal rates are discussed.