Systems of equations contain variables.
Conversely, an endogenous , or dependent, variable is defined within the model in terms of other variables. Frequently, you can partition models so that endogenous variables for which you solve one section of the model become exogenous variables in another section. The summation term represents unsold inventory. A monopoly may raise prices to maximize profit, but a company in a competitive market might first optimize its prices to reach its marketshare goal and then, constraining the prices, maximize profit by controlling costs. The decision variable in all my examples might be the Number Produced , presumably a controllable quantity.