Energy losses in a typical distribution system can range from 6% to 10%, depending on system characteristics, installed equipment, and operating strategies of the distribution network. Loss reduction during peak periods needs special attention, as losses in the system and the cost of the losses are the highest during this time. The distribution system owner (DSO) always strives to reduce power losses in the distribution network, which eventually leads to energy saving and cost reduction. This paper presents the model of a selected 33 kV, 11 kV, and 415V network, which is part of the Muscat Electricity Distribution Company (MEDC) network. In order to quantify the losses in various components, numerical simulation is carried out using the ETAP software package. The technical losses, power factors, and voltage profiles are quantified and analyzed. This paper also investigates optimal conductor and cable selection for 11 kV lines and capitalization values for transformer losses to alleviate system losses and hence reduce the system operational cost. The method of determining optimal conductor and cable size for an 11 kV distribution network is presented, where the cost of losses for various conductors with their extra construction or material costs are compared. A detailed model for calculating capitalization values for distribution transformer losses is also presented, along with a sample calculation of the capitalization values. Utilizing these capitalization values, transformer buyers can calculate the total life cycle cost of distribution transformers and select the most economical one.