In modern power distribution networks, Distributed Generation (DG) significantly enhances system performance and operational efficiency. Demand Side Management (DSM) serves as a strategic approach to optimize DG deployment. This study introduces a novel optimization framework that integrates DSM with demand response mechanisms and DG placement. The methodology in this paper identifies optimal DG capacities and locations by evaluating real and reactive power losses alongside voltage profiles. To ensure environmentally sustainable and economically viable operations, the system's daily performance is optimized both with and without demand response integration. A Non-Dominated Sorting Firefly Algorithm (NSFA) is employed for multi-objective optimization, while a fuzzy decision-making model selects the most suitable solution from the Pareto front. The proposed approach is validated using the Practical 32-bus test system, demonstrating its effectiveness through simulation results.