Generally, I suggest you to separate HTML markup from client side logic and write all the logic in a separate javascript file. For instance, your javascript code might look like this:
(function ($) {
$('select').on('change', function () {
var value = $(this).val();
var text = $(this).find('option:selected').text();
$('<div class="item" data-value="' + value + '">' + text + '</div>')
.appendTo('#sortable');
});
})(jQuery);
Have a look at a sample jsFiddle: http://jsfiddle.net/rsPW7/1/