The document presents an analytical approach for optimal placement of combined distributed generation (DG) and capacitor units in a distribution system to minimize power losses and improve voltage profile. It proposes indices to measure power loss reduction and voltage deviation reduction. The methodology determines the optimal DG location for maximum loss reduction, and then the optimal capacitor location for maximum voltage improvement. This methodology is tested on the IEEE 33-bus system with different DG and capacitor combination scenarios. Simulation results show the methodology effectively reduces both power losses and voltage deviation.