In this paper, two generalized algorithms are presented for sizing and allocating distributed generation (DG) units. To determine the size and location of a single DG unit, a heuristic method based on sensitivity analysis and quadratic curve fitting technique has been proposed. Another heuristic technique based on a loss improvement index has been introduced for allocation of multiple DG units. These studies are carried out using two IEEE test distribution systems which are multi-phase and unbalanced in nature. This analysis shows that the use of appropriate size and location of DG reduces total power loss in a distribution system significantly and hence improve the steady-state voltage profile. Methodologies described in this paper gives the distribution system planner an idea about the size and location DG unit which would be the most beneficial in terms of system efficiency and stability.