1) A decision variable is a formal variable denoting the choice about a single element of a decision (eg, budget level or whether to undergo surgery). In general, a decision-maker makes choices among alternatives, which are defined in terms of particular settings of several decision variables, rather than about individual decision variables. For example, a car purchasing alternative may involve such decision variables as price, model, options, time of purchase, and choice of dealer. Some decision variables arise as a consequence of the domain in which the decision is being made, while others result from the decision-maker's unique circumstances.

2) Less rigorously, the term decision variable is also commonly used to denote choices among alternatives.

See also: Decision Domain.