Alice supports both "parameters" and "variables". Variables are local to a method and are reset to their default value each time the method is started - so unless you keep the method running, the value won't be permanent. (Since the world is always running, world level variables will keep their values regardless of what other methods are active.)
Parameters are values passed to functions and other methods. In both the function and method templates there are buttons to click on to create new parameters or variables which will bring up menus to select name, data type, etc. You can also create a world level variable by clicking on a button in the world property list.
Once you have created a variable or parameter, you can drag in into the main edit area and set its value. There are too many option to describe here but basically there are math functions that can be used in the pull down menus and a variety of object level and world level functions which can be seen in the respective function lists.
If you have access to one of the texts, you might go through the index references to "functions" and "variables" - although they really cover only a few of the many options available. The best way is just to spend some time working with the options - especially the world level functions - see
http://www.alice.org/community/showthread.php?t=423 .