Setup JAVA_OPTS as a system variable with the following content:
JAVA_OPTS="-Xms256m -Xmx512m"
After that in a command prompt run the following commands:
SET JAVA_OPTS="-Xms256m -Xmx512m"
This can be explained as follows:
These values should be changed according to application requirements.
EDIT:
You can also try adding it through the Environment Properties menu which can be found at:
EDIT 2:
JAVA_OPTS is a system variable that stores various settings/configurations for your local Java Virtual Machine. By having JAVA_OPTS set as a system variable all applications running on top of the JVM will take their settings from this parameter.
To setup a system variable you have to complete the steps listed above from 1 to 4.