Based on the review of related literatures, this paper finds that the formation of service clusters is helpful to the cost saving, knowledge overflow and close access to the global network.

In terms of the problem with the cotton production in Xinjiang, under the ensuring of high yield, proper decreasing invert of the substance, machinery and labor force could simply cultivate, save cost and increase profiets.

Smith s principle that division of labor creates wealth is only one way to save cost.

In order to solve the hold-up problem in supply chain,this paper uses game theory to study the upstream supplier s wholesale pricing strategies in a two-tier supply chain when the downstream manufacture is engaging in the cost reducing R&D.