The instructions say install shower tray on 20mm plywood (to ensure
flat).

But is the outer edge of tray supposed to rest on the very edge of the
plywood. Seems a bit dodgy to me ??

Any suggestions,as i need to raise tray by about 50mm, as waste falls
bang on a ceiling joist.

Its either severly notch the joist and then add a strengthening beam
alongside it. Or raise the tray up.