  Fault diagnosis is the problem of determining a set of faulty system
components that explain discrepancies between observed and expected behavior.
Due to the intrinsic relation between observations and sensors placed on a
system, sensors' fault diagnosis and placement are mutually dependent.
Consequently, it is imperative to solve the fault diagnosis and sensor
placement problems jointly. One approach to modeling systems for fault
diagnosis uses answer set programming (ASP). We present a model-based approach
to sensor placement for active diagnosis using ASP, where the secondary
objective is to reduce the number of sensors used. The proposed method finds
locations for system sensors with around 500 components in a few minutes. To
address larger systems, we propose a notion of modularity such that it is
possible to treat each module as a separate system and solve the sensor
placement problem for each module independently. Additionally, we provide a
fixpoint algorithm for determining the modules of a system.
