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Achieving high-distribution reliability levels and concurrently minimizing capital costs can be considered as the main issues in distribution system optimization. Determination of the optimum number and location of switches in distribution system automation is an important issue from the reliability and economical points of view. In this paper, a novel three-state approach inspired from the discrete version of a powerful heuristic algorithm, particle swarm optimization, is developed and presented to determine the optimum number and locations of two types of switches (sectionalizers and breakers) in radial distribution systems. The novelty of the proposed algorithm is to simultaneously consider both sectionalizer and breaker switches. The feasibility of the proposed algorithm is examined by application to two distribution systems. The proposed solution approach provides a global optimal solution for the switch placement problem.