Abstract: Having analyzed the operation of the supply chain of the garment sector of China,the common problems existed in the garment supply chain are discussed,pointing out that the customers demand change brings about demand forecast risk for garment enterprises.To investigate the effect of vendor managed inventory(VMI)-based policy for supply chain,a system dynamics model was developed for a garment enterprise based on examing the feedback mode of dynamic information of the supply and its operation efficiency and utilizing the method of system dynamics.The order and inventory situations of each member of the supply chain in VMI and non-VMI are presented by simulation and quantitative comparison.The results show that when compared with traditional supply chain operation,the bullwhip effect on a VMI system was becoming weakened.The inventory and order of the supply chain members are more placidity.At the same time,the ability of risk resistance is improved.