The selection of controlled variables (CVs) from available measurements through exhaustive search is computationally forbidding for large-scale processes. We have recently proposed novel bidirectional branch and bound (B 3 ) approaches for CV selection using the minimum singular value (MSV) rule and the local worst-case loss criterion in the framework of self-optimizing control. However, the MSV rule is approximate and worst-case scenario may not occur frequently in practice. Thus, CV selection by minimizing local average loss can be deemed as most reliable. In this work, the B 3 approach is extended to CV selection based on local average loss metric. Lower bounds on local average loss and, fast pruning and branching algorithms are derived for the efficient B 3 algorithm. Random matrices and binary distillation column case study are used to demonstrate the computational efficiency of the proposed method.Index Terms-Branch and bound, combinatorial optimization, control structure design, controlled variables, self-optimizing control. . His current research interests include combinatorial optimization, control structure design, crystallization, decentralized control, process and performance monitoring, and population balance equations.Yi Cao (M'96) received the M.Sc. degree in control engineering from Zhejiang University, Zhejiang, China, in 1985, and the Ph.D. degree in engineering from the University of Exeter, Exeter, U.K., in 1996. He is a Senior Lecturer with the School of Engineering, Cranfield University, Cranfield, U.K. His research interests are in advanced process control, including plant-wide process control, nonlinear system identification, nonlinear model predictive control, and process monitoring.