When a miss occurs, the cache controller must select a block to be replaced with the desired data. A replacement policy determines which block should be replaced.
With direct-mapped placement the decision is simple because there is no choice: only one block frame is checked for a hit and only that block can be replaced.
With fully-associative or set-associative placement, there are more than one block to choose from on a miss.
If you choose Direct-Mapped Method the choice of replacement policy will not affect the process. Choosing Fully-Associative Method lets you select different replacement policies and find the best one for the reference string.