We investigated the capability and tolerance of the optical collinear system by numerical simulation. Using Fourier optics, the simulation can calculate the hologram pixel image intensity distribution, the corresponding signal-to-noise-ratio and its histogram. For holographic data storage using the optical collinear system, we presented and we discussed the medium position and the medium thickness dependency, the medium displacement in the x-, and the z-directions during the hologram recording process, and the recording wavelength shift.