Distributed Generation (DG) plays an important role in distribution systems due to the increasing demand for electrical energy in day to day life. Optimal location and sizing of DG sources are two important factors to be determined for loss reduction and voltage profile improvement. In this paper, Modified Novel method (MNM) and proposed Direct Search Approach (DSA) has been presented for the optimal allocation of Distributed Generator (DGs) in a radial distribution system to improve voltage profile and to minimize the power loss. Two types of DGs are considered for analysis i.e. Type 1 (DG is operating at unity) and Type 3(DG is operating at lagging power factor). Two methods are implemented on standard IEEE-33 bus and IEEE-69 bus test systems and the results are compared with an existing IA method in terms of percentage loss reduction.