Writing Exception

Question

I am trying to figure out the best way to write exception classes for my program. I think i have 2 choices:
1) For each type of user exception I create an Exception class. All of them are inherited from java.lang.Exception. So for example I have
public class LocationNotFoundException extends Exception {
2) Write Exception classes based on the level of code. So any basic exception will throw InfrastructureException:
public class InfrastructureException extends Exception {
Then if exception happens in DAO then DAOException:
public class DAOException extends InfrastructureException {
Is there any other choice? Which approach is better and why?
Thanks

Answer 1

I think the idea is to write different Exceptions for
different means of failure that need to be handled
differently. If two Exceptions are being used where
they differ only in the information being conveyed,
but neither warrants handling the situation much
differently, they can be smushed into one.
~CheersThanks. So if I have LocationNotFoundException and DepartmentNotFoundException and both are same in functionality, its better to instead define ObjectNotFoundException and use it instead?
How about using inheritance between these Exceptions? Is it a recommended approach?