The spatial temperature distribution in the highly energy-intensive furnace unit in a steam reforming-based hydrogen manufacturing plant determines the energy efficiency of the plant. While the fuel distribution among the burners can be manipulated to control the furnace temperature distribution, adequate temperature measurements is a prerequisite. Typical furnaces have hundreds of tubes and burners, and economic considerations dictate that the number of temperature sensors and flow actuators required for automatic temperature optimization be minimized. In this article, we investigate several formulations for the design of the optimal sensor and actuation configurations for an industrial furnace. We initially formulate the optimal sensor placement problem as a bi-level optimization problem, and exploit the problem structure to obtain an equivalent mixed-integer linear program formulation. We then provide an extension to the combined sensor and actuator placement. We demonstrate the efficacy of our approach through simulation case studies based on industrial data. (C) 2016 American Institute of Chemical Engineers