Really depends on the size of the cooker. The smaller smokers or pits will do well with the exhaust coming in on the top an inch or two. If it's a larger smoker, then it would be better to come in at grate level (your lowest grate). It also depends on how much smoke you want on your food, the farther away the entrance to the exhaust is from your lower grate, the less smoke that will touch your meat, because it's headed out the exhaust. If your exhaust is at grate level, then the smoke has to move over and around the meat prior to exhausting. I have a 150 gallon RF pit, with my exhaust in the upper right hand corner, about 1" into the pit, 8" or so from the lower grate, i get a nice smoke ring on all my food and get that little kiss of smoke flavor, but could stand for a bit more smoke. If I ever build another RF, the exhaust will be at grate level for sure. Hope this helps.