Distribution system reliability, defined by the expected frequency and duration of load service interruptions caused by component failures, is shown to be dependent on the topology of the distribution network, as well as on the relative placement of loads and generators within the system. In a shipboard electrical distribution system, a network topology based on the breaker-and-a-half scheme is shown to confer greater reliability than equivalent distribution topologies based on the ring bus and double bus, double breaker designs. The overall service interruption rate in the breaker-and-a-half topology is 17.8% less than that in the ring bus topology and 40.0% less than that in the double bus, double breaker topology. Further, an optimized equipment placement configuration is algorithmically identified for the loads and generators within the breaker-and-a-half distribution network, further increasing reliability. The optimal equipment placement decreases the overall system interruption rate by 0.54%. The paper also determines an optimal location for additional in-feeds that should be connected to the ship's most critical loads so that maximum benefits to service reliability are obtained.