Dungeons and Dragons is all about PCs doing crazy things and the DM reacting to them. Granted, groups are as diverse and varied as fish in the sea, but ingenuity is a universal trait across games. You see this in character optimization, wacky solutions to problems (like the kitten Sleep-spell defense), and in any DM who is writing up his next encounter.
As a general response to your problem, the D&D rules are a framework from which to build your world and encounters. Take out the orcs, the dragons, etc. and you're left with a system constructed and refined over the years to simulate scenarios in a (mildly) balanced way. Ever come up with an insane hypothetical question and wonder how to act it out? I like to think that this is how Gygax and Co. first came up with the idea for D&D.
To return to your question, remember that the rules are there as a guide to these situations. They may not cover all things, but they encourage improvisation. For example, advantage/disadvantage is a useful tool in approximating some situations. Let's take a look at your situation in particular:
- Fire builds smoke, but smoke likes to disperse, so it would probably take a long time to accumulate in a cave unless the cave was very small or the fire was very large and inside the cave itself. (General knowledge).
- Seeing point one, it is likely that the enemies would flee out from the cave before the smoke did any real harm to them. (Again, general knowledge)
- When that happens, they will be confused — depending on the inhabitants' intelligence — and eventually probably distracted, granting the PCs a surprise round if they're hidden. (Rough D&D mechanics)
This is a workable scenario. It sounds reasonable and rewards the PCs for their creativity. However, there are plenty of other ways this could work out:
- The PCs could get caught building the fire (it's probably fairly noisy work, or a patrol might just happen by)
- The cave might be the den of wild bears (instead of the expected inhabitants), and they get enraged at the encroachment in their home
- The cave could be an ambush set by the enemies, and attempting to light a fire has your PCs walking into it
All of these are just ideas. The world is the DM's sandbox — don't be afraid to explore it. It's a game, and at the end of the day you and your players will figure out exactly how much they enjoy your work.