We present the simulation and design optimization of an integrated light-emitting-diode/photodetector (LED-PD) sensor system for monitoring of light absorbance changes developing in analyte-sensitive compounds. The sensor integrates monolithically both components in a single chip, offering advantages such as downsizing, reduced assembly complexity, and lower power consumption. The changes in the optical parameters of the analyte-sensitive ink are detected by monitoring the power transmission from the LED to the PD. Ray tracing and coupled modeling approach (CMA) simulations are employed to investigate the interaction of the emitted light with the ink. In highly absorbing media, CMA predicts more accurate results by considering evanescent waves. Simulations also suggest that an approximately 39% change in optical transmission can be achieved by adjusting the ink-deposited layer thickness and varying the extinction coefficient from 10-4 to 3×10-4.